Music Marketing Money

Weekly Dispatch March 16, 2015

Carlos Diaz March 16, 2015 Weekly Dispatch No Comments

This is a weekly digest of the top news at the intersection of the music industry, brand marketing and commerce courtesy of Carlos Diaz & Music Audience Exchange.

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McDonald’s + Ex Cops: A Lesson in Brand/Artist Matchmaking- “The recent dust up between McDonald’s & the band Ex Cops highlights a tension that exists between some artists & brands and shows the importance of a true value exchange.” By Nathan Hanks: Link



Can McDonald’s pull off a SXSW sponsorship?- In its ongoing bid to win over millennials, McDonald’s is making its 1st debut at South by Southwest. The fast food giant’s activations are a traditional festival sponsorship ex. food truck, interactive lounge & party. If the brand’s recent attempts are any indication, McDonald’s is in for a challenge. By Adweek: Link

Mazda brings the heat to Austin’s SXSW festival- Mazda, Official Automobile Sponsor of South by Southwest, is putting its stamp on the ten day festival, with consumer engagement activities for the duration of the conference. Mazda will interact with SXSW attendees through a panel discussing the relevancy of a brand in today’s digital revolution, interactive technology, music installations, gaming associations & in-vehicle experiences. “Mazda’s presence at SXSW puts us front & center in the conversations taking place around experiences, music & creativity,” said Russell Wager, VP of Marketing. “The goal is to enhance an attendee’s experience with a memorable Mazda brand interaction.” By PR Newswire: Link

Visa issues a millennial marketing challenge to startups- Visa is going to enlist the startup world for answers to some of its biggest marketing challenges in a competition that will kick off at SXSW. Dubbed the “Everywhere Initiative,” after Visa’s “Everywhere you want to be” platform, the competition aims to get fresh perspectives on key business initiatives like reaching the millennial market. “The competition is part of a broader effort to fuel digital innovation through new partnerships & ventures,” said Shiv Singh, Global Head of Digital & Marketing Transformations at Visa. “We’re in such a transformative time that businesses & marketing organizations can’t just depend on themselves or their agencies to solve their business problems,” said Singh. By Advertising Age: Link

Neiman Marcus teams up with hot music acts to ‘make some noise’ in Austin- Neiman Marcus rocked the house at last year’s SXSW & the luxury retailer is returning to Austin again this year. As part its “Make Some Noise” initiative, celebrating women who “rock” in their respective fields the program will feature panel discussions & performances from cutting edge artists. Last year Neiman’s South by Southwest activation generated 80 million impressions (27 million in press & 53 million on social media). Rolling Stone magazine heralded two performances by Charli XCX & Chromeo as among the festival’s top shows. In addition to the SXSW project, the retailer’s ad campaigns have employed emerging female artists in place of models. Wanda Gierhart, Group CMO, describes the push to engage young female consumers & make the brand relevant to the next generation. By Adweek: Link

Dodge partners with Universal Pictures & Atlantic Records on ‘Furious 7′- Dodge, which was part of the original blockbuster Fast & Furious film announced a new promotional partnership with Universal Pictures for “Furious 7″. This is the first ever partnership with Atlantic Records on music videos that support the labels “Furious 7: Original Motion Picture Soundtrack”. In the weeks leading up to the album’s debut, Atlantic has been releasing a series of exclusive singles from artists. In this exclusive partnership current & vintage Dodge vehicles are being featured in the music videos. By PR Newsire: Link

Red Bull’s music academy returns to New York- The Red Bull Music Academy, the traveling bonanza of cross-genre performance & education, will have its third annual extravaganza in New York in May. As usual, the scope will be wide & deep with different genres like hip-hop, dancehall, electronic music, first generation minimalism, disco, & noise. By Arts Beat: Link

Innovative spirit marketing campaigns- With all eyes on the NFL Super Bowl last month, Jose Cuervo showed that often less is more when it comes to consumer engagement. Meanwhile two vodka brands joined forces with the famed music awards ceremonies- NME & Grammys. By The Spirits Business: Link

Major League Soccer kicks off 2015 season with a millennial focus- In 2015, MLS’ season will include a new look, two new expansion clubs, new star players & new media partners. All this is geared towards continuing to cater to the highest percentage of millennial audience of any major US sport. By Rapid TV News:  Link

‘Advertainment’ is on the rise in pop music- A recent CU Denver study found there were 1,544 product references in hit songs during a 54 year period, with 20 of the top 30 songs in 2006 alone. Automobiles were among the most popular brands mentioned. Study author Storm Gloor, Associate Professor of Music at CU Denver’s College of Arts & Media, said the uptick is because today’s music business is less about selling songs & more about marketing the artist as a brand. “In today’s music business, artists & their stakeholders have had to take non-traditional approaches in navigating the marketplace,” Gloor said. Singer CeeLo Green, for example, raked in more than $20 million in revenue in 2011, with most of it coming from brand & marking opportunities rather than selling recordings. By Denver Business Journal: Link

Brands are now posting more to Instagram than Facebook- Instagram is luring brands away from Facebook, according to a new report from research firm L2. The report found that brands now post more content on the photo sharing app. The reason is that brands know everything they post on the Instagram platform will appear in a fans’ feeds. On Facebook, if brands don’t pay to promote their posts much of the content will not appear in a followers’ news feed. That trend is turning Instagram, which is owned by Facebook, into a growing marketing force. The report outlines how brands have been building their followings on the app, which recently topped 300 million monthly users. Another reason for Instagram’s growth is the fact that it attracts a younger users than Facebook, according to L2. By Adweek: Link

Stories (not ads) help brands connect with millennials- Brand marketers would be wise not to underestimate the importance of being in the right place at the right time with the right message to reach millennials. If your company is targeting this group than you know that millennials are everywhere online today- accessing & interacting with your corporate brand from devices. Marketers are smartly investing in content to reach millennials whenever & wherever they may be. In a recent study, NewsCred, surveyed 500 US millennials & found that 47% open up company communications most if not all of the time. 62% surveyed agreed that content they read & see online (websites, social media, news) from a company makes them feel more connected & loyal to the brand. By Business2Community: Link

Four tips for effective content marketing- Brands should actively involve the consumer at the initial stage of the content creation according to Kumar, Director & Head of NTUC Membership. As an example a decade ago Coca-Cola innovated the music scene & launched a “passion targeting approach” to generate brand presence. Since then it has evolved its strategy to build on consumers’ passion points. More recently it partnered with Maroon 5 to stream the band recording music live in studio. Fans were encouraged to follow the live feed & give the musicians live feedback. By doing so, the brand was able to encourage its consumers to be part of the content creation process. By Marketing Interactive: Link

Millennials drive sustainable food practices at fast casual restaurants- Shake Shack is one of several emerging “fast casual” restaurants like Panera, Five Guys & Chipotle.  These restaurants are appealing to millennial diners with elevated, healthier, ethical & more sustainable food experiences. Shake Shake & McDonald’s both serve burgers, but that’s where the similarities end. By EcoWatch: Link

How millennials travel- Yahoo Travel surveyed 2,000 travelers to glean some insight into what motivates millennials to book a trip & how they travel. Social media allows users to share & repost things that interest them and for millennials it has been a great source for travel inspiration. Those under 35 years old are also more likely to be influenced by articles & videos on websites. By Yahoo: Link



Twelve radio promotion tips to help build awareness for your band- Radio promotion is the process of soliciting your music to get airplay, build professional relationships & make fans. By Hypebot: Link



A&R in a digital age- The traditional music business model was based on selling physical copies of recordings. With the advent of digital technology & a sharp decline in recorded music sales, the focus is shifting slowly but surely into turning artists into brands. From an A&R perspective, the goal has become finding artists that have a great following not artists that just have talent. In particular, the last ten years have seen brands move from sideline sponsorships to center stage. Hip Hop mogul Jay-Z & Latin Bachata superstar Prince Royce are good examples. Jay-Z partnered with Samsung in 2013 for the release of his album, Magna Carta Holy Grail, which was exclusively released through a mobile app. Prince Royce chose Pepsi as the official sponsor of his tour in 2014, which included several commercials targeted at the Hispanic community. It is important to realize that both partnerships added their own twist to the existing modus operandi of the business. By Music Business Journal: Link

Listeners are becoming their own music supervisor- The recent numbers are sobering for broadcast radio. In the 2015 version of Edison Research’s “Infinite Dial” survey, respondents between the ages of 12 to 24 say it’s “very important” or “somewhat important” to keep up with new music. The source they use most often to keep up to date are “friends & family” at 28%, then YouTube & Pandora. Only 8% of 12-24 year olds cite AM/FM Radio as their top source just ahead of Spotify at 7%. The numbers are- friends & family 28%, YouTube 28%, Spotify 7% & Facebook 4%. However among respondents of all ages AM/FM radio still leads any other source at 29% as the most used for keeping up to date with new music. By Billboard: Link

Nine stats show how internet marketing is changing the music scene- Americans spend billions of dollars every year on concerts, music downloads, CD’s & merchandise proving that the love of music endures even as technology changes. What is shifting, though, is how people buy & listen to music. These nine stats detail internet marketing & the modern music lover ex. according to a recent Nielsen study 75% of Americans actively choose to listen to music compared to 73% for watching TV. By The Business Journals: Link

Universal Music CEO Lucian Grainge wants you to pay for your music- The world’s biggest music label used to be OK with people streaming music without paying for it. But now it has changed its mind. Grainge, Universal Music Group CEO, says the music industry needs to shift away from free, ad-supported music toward services paid for by the listener. By Recode: Link

‘Blurred Lines’ verdict likely to alter the music business- This legal decision has set a new precedent because “paying homage to musical influences was an acceptable & indeed commonplace way of conducting business & even showing respect for one’s musical idols, (but) after today, doubt has been cast on where the line will be drawn for copyright infringement purposes,” according to Howard King, lead attorney for Thicke & Williams. Music copyright trials are rare, but allegations that a song copies another artist’s work are common. Singers Sam Smith & Tom Petty recently reached an agreement that conferred songwriting credit to Petty on Smith’s song, “Stay with Me,” which resembled Petty’s hit “I Won’t Back Down.” By Yahoo: Link

Apple watch & the music business- The tech world is abuzz with the official unveiling of the Apple watch. The music business can look to it as a possible opportunity as well. The music business has always produced plenty of music that customers want but it’s been new delivery methods that have led to increased sales. The industry has historically turned on a dime when new technology offers greater convenience. By Forbes: Link

Coachella is set to power up its music festival- The modern music festival tries to be all things to all people. Consider, for instance, this year’s line-up. By LA Times: Link

Music Cities Summit to explore music’s wider role- Culture officials, promoters, planners & educators plan to explore the ties between music & urban development. By Billboard Link



US Senate Judiciary Committee hearings could protect the future of streaming music- There is a looming problem facing the streaming music industry if the American Society of Composers, Authors & Publishers (ASCAP) & other performing right organizations are freed from the “consent decree” issued by the Justice Department in 1941 to ensure a competitive marketplace. Companies like Pandora, Spotify, Apple with iRadio & with Prime Music have benefitted from the shift in consumer preference to streaming music over downloads or singles. On the other, these companies have had their profitability held in check by onerous royalty rates that ASCAP & others are seeking to increase. Performing Rights Organizations (PROs) are heavily lobbying the Justice Department to update decades old agreements as the Copyright Royalty Board, a part of the Library of Congress, prepares to approve new royalty rates that internet services like Pandora will have to pay record labels. By Forbes: Link

Jury finds Thicke & Williams ripped off Marvin Gaye’s song in ‘Blurred Lines’- A jury awarded Marvin Gaye’s children nearly $7.4 million after determining singers Robin Thicke & Pharrell Williams copied their father’s music to create “Blurred Lines,” the biggest hit song of 2013. By Fox News: Link



Labels say ‘no’ to Apple’s cheap streaming service & consider capping SpotifyRecord labels are reportedly standing firm against Apple’s plan for an $8 per month streaming music service & considering new listening caps for Spotify. While the labels have been eager to establish new revenue sources after the decline of CD’s, some are now worried that these services still aren’t bringing in enough money. By Macworld: Link

Spotify music streaming service- Recently Jonathan Forster, Spotify VP of Europe, stressed the company’s plans for expansion & the financial opportunity that represents for artists. “If we’re going to think about what this means for artists in a bigger way, we should at least think about multiplying that number by 10,” he said. “20 billion dollars to the music industry would be a very sizeable amount to artists,” Forster added. According to a study published in February by French music industry trade group SNEP & accounting firm Ernst & Young, the recording labels pocket 46% of streaming company’s subscription revenues, while artists, publishers & songwriters share 17%. The rest goes to streaming providers & taxes. By Business Insider: Link

Samsung’s Milk Music free streaming service hits the web- Samsung’s Milk Music streaming service is spilling over into the web. Milk Music, which the electronics giant launched on mobile a year ago, is now available on Samsung’s site. Until now users could only access the service on Samsung Galaxy phones & tablets, or the Gear S smartphone & Samsung Smart TV’s. By USA Today: Link

Spotify vs. Beats Music vs. Google Play- From the ongoing battle between Spotify & what Beats Music is going to do next the music streaming industry has been all over the news. But hearing Taylor Swift’s thoughts on the “value of art” or seeing every celebrity use Beats headphones isn’t going to help you choose the right streaming service. By Tech Times: Link

Building a business on YouTube- You likely already understand the power that YouTube can have as a marketing tool for businesses. But some people have also been able to actually build entire businesses around the platform. There’s a growing community of lesser known YouTuber’s that are finding ways to work with brands & build financially successful businesses just by posting YouTube videos. By Small Business Trends: Link

Smule develops music making apps that connect people- Jeff Smith, CEO, is optimistic about the music industry. Smule has been seeing success with social music apps like Sing! Karaoke. The company saw about $40 million in sales last year, compared to $21 million in 2013. It now has 350,000 paying subscribers from a monthly active user base of 21 million. By TechCrunch: Link


Carlos Diaz

Carlos Diaz

Carlos is Chief Revenue Officer at Music Audience Exchange. Previously, Carlos built and operated large sales organizations for marketing and technology companies including ReachLocal, Neustar and Hibu.
Carlos Diaz

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